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The Healthy Food Paradox

November 3, 2010

Would you spend an extra dollar today on the purchase price of an energy efficient car if it would save you a dollar of gas in the future?

For most, the answer is no. Consumers are unwilling to pay more today for an energy efficient vehicle that will result in future net benefits—such as savings on fuel. In fact, “consumers are willing to pay only $0.37 up front to reduce expected discounted future gasoline expenditures by $1.” Economists describe this as the Energy Efficiency Paradox.

When I first learned about the Energy Efficiency Paradox I wondered about its application to the food choice context. In other words, are consumers willing to pay more today for healthy foods that will result in future net benefits, such as reduced risk of illness, savings in medical bills, and increased quality of life? People do not act paradoxically in just the energy context; they do so as well when buying food. I call this the “Healthy Food Paradox.”

One of the main reasons consumers are reluctant to spend more on food now to save more on medical costs later is that grocery bills are a known, upfront, irreversible cost while savings on medical bills or increased quality of life is an unknown, and to some extent, unquantifiable stream of benefits. Even though it is common knowledge that what you eat affects your health, consumers prioritize present costs over future savings in part because it is much easier to sum up one’s food costs than to estimate the future costs of illness (an illness one may or may not develop).

It does not help that junk foods are both more filling and cheaper than healthy foods. Fruits and vegetables, while rich in nutrients have lower energy density than junk foods, meaning that junk foods “pack the most calories per gram.” In 2007, researchers at the University of Washington found that “…higher-calorie, energy-dense foods are the better bargain for cash-strapped shoppers. Energy-dense munchies cost on average $1.76 per 1,000 calories, compared with $18.16 per 1,000 calories for low-energy but nutritious foods.” To consume the recommended 2,000 calories, it would cost less than $4 per day if it consisted of junk food compared to over $36 for low-energy dense foods. Additionally, “junk food prices [] are less likely to rise as a result of inflation.”

While eating $4 of junk food per day is affordable, the costs experienced over the long term are not. Chronic disease, rates of which can be lowered through a healthy diet, costs the U.S. trillions of dollars. A 2007 study, An Unhealthy America: The Economic Burden of Chronic Disease, reported that seven chronic diseases—cancer, diabetes, hypertension, stroke, heart disease, pulmonary conditions, and mental illness—cost the nation $1.3 trillion annually, including $277 billion for treatment and nearly $1.1 trillion in lost productivity. This sum equates to $361 per month per American for 2007 for just those seven diseases.”

What if consumers, instead of paying for medical treatment down the road, invested more per month on nutritious food as a preventative measure to avoid chronic illness? This may not be as cost prohibitive as one might think. A 2006 study in the Journal of Nutrition examined the “long-term costs associated with a change from a traditional western diet (high in sugar and saturated fat) to a Mediterranean diet (high in vegetables, fruits, and omega-3 fats) in people who had suffered their first heart attack.” By spending an extra $10 a month on food, the Mediterranean diet group experienced a better quality of life and a 40% decrease in “deaths from all causes and a significant reduction in minor health problems, including chest pain and non-fatal strokes.”

Even if people would be willing to spend more on healthy foods, they may not live in communities that afford them that choice. Low-income areas have fewer supermarkets and groceries that carry healthy foods; stores in low-income communities stock lower-quality fresh produce; and public transportation to supermarkets is often lacking. “Fast-food is often more convenient and readily available than home-prepared meals or fresh foods, particularly in low-income neighborhoods.”

Local and federal governments should take the Healthy Food Paradox, especially the high discount rate for future health benefits, into consideration when creating policy. Creating affordable and accessible healthy foods, while also educating consumers on the long-term effects of eating well, is just as important as increasing the costs of unhealthy foods through taxes. I say make the long-term costs more evident!

If I could spearhead a campaign to address this issue, I would commission a study that examined the food purchasing behavior of an unhealthy group against a healthy group within the same income bracket. I would collect both food-related receipts and medical bills, in addition to evaluations of the groups’ self-perceived sense of happiness and satisfaction. I hypothesize that the healthy group would have higher net benefits (higher food expenditures, but lower medical bills and higher rates of satisfaction). Then, I would create attractive ads that feature the collection of receipts with a totaling at the bottom, making it as clear as possible that a healthy diet, while perhaps more costly in the present, results in higher future benefits. I would post these ads near the most popular food establishments.

This is my idea to address the Healthy Food Paradox. What’s yours?

3 Comments leave one →
  1. Dr. Julia Baldwin permalink
    November 4, 2010 6:36 pm

    Americans spend about 2,000,000 on food a year!! Unfortunately most individuals have a misconception regarding healthy food. The erroneous way of thinking is generally that it is expensive and unhealthy food is cheap….that’s why perhaps why we’re all so overweight.

    But for most people it doesn’t have to be this way.

    Consequently you tend to do a lot more cooking at home. You become much more creative with your cooking style, ingredients and staples….and eating out is not as satisfactory as the healthy food one can put together at home in an expeditious manner!
    Eating fast and unhealthy food is also very expensive. I recall the last time I had a loaded taco meal averaged over $5. And if you have properly set up your kitchen you will find it actually takes less time to cook a healthy meal than it does to place an order and fill your order at any fast food joint.

    In this horrendous economy every single penny counts. Despite what some economists say, times still feel pretty tough, and few of us are ready to throw caution to the wind and start emptying our wallets gourmet food. A survey published in early 2009 even found that people were cutting their food budgets by spending less on healthy food and more on, of all things, hot-dogs! But a new study shows that you don’t have to live on white bread and wieners to save money; eating healthy foods can be just as cost-efficient. The research, published in the American Journal of Clinical Nutrition found that eating healthy foods on a budget is as easy as replacing some red meat with less-expensive whole grains and bean. Therefore, if you want to save money, eat healthier and decrease your medical bills….start cooking at home, eat less meat, eat canned fish, buy in bulk and buy seasonal foods.

    It is a sad reflection on our culture that so many people rely on fast food for their daily sustenance, and my heart goes out to those who truly cannot afford better. But I contend that many of the bad decisions we make about food each day are more an issue of (perceived) convenience than price.

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  1. The Healthy Food Paradox « Wagner Food Policy Alliance | Cheap Healthy Foods

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